Estate, Gift & Trust Tax Updates (2025)
Understanding the New Rules for Wealth Transfer and Estate Planning
The 2025 federal tax law changes include important adjustments to estate, gift, and trust taxation—particularly for those with substantial assets or multigenerational planning goals. With the recent enactment of the One Big Beautiful Bill Act (OBBBA), now is the time to revisit your estate-planning strategy.
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We guide individuals and families through these changes, helping you align your legacy goals with the updated federal rules and preserve wealth for future generations.
Key 2025 Estate & Gift Tax Updates
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Lifetime Estate and Gift Tax Exemption Increased
Thanks to the OBBBA, the lifetime federal exemption for estate and gift tax is permanently increased to $15 million per person (and $30 million for married couples) beginning January 1, 2026.​
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The previous exemption of approximately $13.99 million per individual (for 2025) therefore becomes a floor rather than a scheduled drop.
Even though your estate plan may not rely solely on this exemption, the increased amount offers greater flexibility and long-term certainty.
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Generation-Skipping Transfer (GST) Tax Exemption Alignment
The GST exemption is also raised in line with the estate/gift tax exemption—$15 million per person (indexed for inflation) under the new law.
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Annual Gift Tax Exclusion & Portability
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While lifetime exemptions grow, the annual gift tax exclusion has also been adjusted for inflation (e.g., to $19,000 per recipient for 2025).
Portability rules remain intact—surviving spouses can continue to use any unused deceased spouse’s exemption, effectively allowing married couples to combine their exemption amounts.
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Trust Income, Distribution Rules & State-Level Considerations
The OBBBA provides more stability in exemption levels, which impacts trust structures, distribution timing, and basis-step-up planning. With some planning techniques now viable over a longer horizon, trust and estate documents should be reviewed for compatibility with the new regime.
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State-Level Considerations
Texas has no state estate or inheritance tax, but if your assets or beneficiaries span other states, state-level rules could still apply.
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Why Planning Now Matters
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Because the OBBBA removes much of the uncertainty around the sunset of the TCJA’s elevated exemptions, large-asset individuals and families have a unique window to re-evaluate strategy. Changes to plan for now include:
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Ensuring your estate plan aligns with the higher exemption amounts—and adjusting gifting or trust strategies accordingly.
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Considering how the permanent $15M per person exemption affects prior assumptions about “use it or lose it” gifting.
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Reviewing timing of distributions, trust elections and basis step-up strategies in light of longer term planning.
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Coordinating multistate considerations and the interaction of federal and state rules, especially for clients with assets or beneficiaries across jurisdictions.
Proactive planning can help you reduce tax exposure, preserve more wealth, and avoid surprises as the law continues to evolve.
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Collaborative Planning for Your Legacy
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Thoughtful estate planning isn’t just about the numbers—it’s about ensuring your legacy, your family’s future, and your values are reflected in your structure.
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